Nevis Business Corporation

What the Business Corporation is

The legal basis for the Nevis Business Corporation is the Nevis Business Corporation Ordinance 1984, as amended. This is a conventional corporate vehicle: ownership rests with shareholders, a board of directors runs the company, and limited liability shields those shareholders from the corporation's debts. A BC may be set up with just one shareholder and one director, an arrangement frequently seen in planning structures.

Among the offshore corporate vehicles found in the Caribbean, the BC is one of the longest-established. It came into existence eleven years ahead of the Nevis LLC and ten years before the Nevis International Exempt Trust Ordinance. Because the governing statute is older, there is a longer history behind it, a more developed body of Nevis case law addressing particular corporate governance issues, and deeper familiarity among advisers who have handled Nevis structures over many decades.

Where it parts ways with the LLC

For planning, three principal distinctions are significant. Structure: the BC follows the classic shareholder-director arrangement, whereas the LLC relies on members and managers. Charging order: under Nevis LLC law the charging order is expressly named as the sole remedy against a membership interest. Because a BC shareholder's interest takes the form of shares, the remedies that Nevis company law makes available against shares are less straightforward than the LLC's clear-cut charging order restriction. Flexibility: an LLC operating agreement allows greater structural latitude than the articles of incorporation and bylaws of a BC.

When the goal is asset protection, these distinctions tend to point toward the LLC. Its charging order clause exists specifically as a device to shield against creditors. A BC's share arrangement can be set up so that enforcement is awkward, yet it lacks that same clean restriction.

Situations where a BC beats an LLC

There are three circumstances in which the BC is preferable. The first is when the parties on the other side, or the relevant jurisdiction, insist on a corporate vehicle holding shares instead of an LLC holding membership interests — certain banking setups, certain commercial agreements, and certain foreign jurisdictions handle shares differently from membership interests. The second is when the plan calls for issuing distinct classes of shares. The third is when the advisers at hand know the corporate model and the demands of running a board better, and the planning goals do not depend on the charging order protection an LLC delivers.

Using the BC within offshore holding arrangements

Within a combined trust-and-company arrangement, the BC can act as the holding company just as an LLC would: the trust owns the shares, the settlor takes the director's seat, and the BC holds the operating assets. What changes is that here the settlor's power flows from being a director rather than a manager. The trustee keeps final control by owning the shares and being able to replace directors.

When cross-border activity calls for a corporate vehicle and the other parties are more comfortable working with a share-issuing company, the BC supplies the appropriate framework. But for a holding vehicle whose sole purpose is asset protection, where the main aim is to restrict what a creditor can do, the LLC is usually the wiser pick.

Directors, shareholders, and governance

One individual may serve as both the single director and the single shareholder of a Nevis BC. A registered agent and a registered office located in Nevis are mandatory, and annual returns have to be lodged. There is no obligation for the BC to convene meetings in Nevis, and decisions may be adopted through written consent. Issuing bearer shares is prohibited; only registered shares are allowed, with the register of shareholders kept at the Nevis registered office.

See Nevis LLC for a side-by-side look at the two structures and Nevis trust and LLC for the way each one combines with a trust.